Auditors slam Commission for inefficient railway funding

A new report from the European Court of Auditors says €28 billion in EU funds didn’t do enough to boost the share of freight shipped on railways—instead, that figure dropped despite beefed up investments.

The watchdogs said the European Commission’s plan to move freight traffic from roads to railways as a way to cut carbon emissions hasn’t worked.

Billions of euros from cohesion funding and the Commission’s so-called TEN-T fund to connect transport routes were spent inefficiently between 2007 and 2013, the auditors’ report found.

The executive laid out a plan in 2011 to cut the amount of freight traveling by road over long distances by moving 30% of those shipments onto rail or water routes by 2030 and over 50% by 2050. But instead, the amount of road freight in Europe has increased since then.

Part of the reason for the misstep is that it’s often cheaper and faster to ship cargo on trucks.

“It’s difficult for the rail sector to be competitive,” auditors behind the report told euractiv.com.

“Companies comparing different methods of transport will continue choosing road instead of rail” if there is no effort to make rail more competitive, the watchdogs said.

On average, freight trains travel at 18 kilometres per mile on cross-border routes within the EU.

The new head of the European Commission’s transport section (DG MOVE) had harsh words yesterday (15 March) for new rules to open up Europe’s “static” rail sector, which he said have been butchered in negotiations with the European Parliament and Council.

The auditors also point out that trains are charged different tolls than trucks, bumping up their costs.

Rail operators have complained that the charges put them at a disadvantage.

Freight trains are charged per kilometre that they travel in the EU, while trucks face different toll systems depending what EU member states they drive through. Some countries charge tolls by kilometre while others charge by the amount of time trucks spent on the roads. The Commission is expected to propose an EU-wide toll system for trucks later this year.

The auditors looked at EU-funded railways in the Czech Republic, Germany, Spain, France and Poland. Overall, the auditors called rail freight around the EU “unsatisfactory”.

“Rail still behaves too much like a monopoly service provider,” said Julia Lamb, secretary general of the European Rail Freight Association. Lamb argued that more competition from newer rail companies would “bring fresh blood to the table”.

In Germany, Poland and the Czech Republic, more EU funding was put into building roads than into rail infrastructure between 2007 and 2013.

One auditor said that “could have been more efficient”.

Between 2000 and 2013, the share of cargo that was shipped by road in Europe rose from 73.7% to 75.4%. As a result, the amount of freight shipped on railways dropped.

In seven EU countries, less than 10% of all freight is shipped by rail. On average, 17.8% of freight in the EU is transported by rail.

The auditors warned that the European Commission needs to step up competition in the rail freight sector to tilt that figure.

“Extra funding will not resolve the problem by itself,” said Ladislav Balko, a member of the Court of Auditors.

In response to the auditors’ report, the Commission defended its track record on funding railways.

“The significant investments in rail have helped to reduce the decline in the market share of rail,” the executive wrote.

The European Commission opened infringement procedures against Poland and the Czech Republic in 2013 for not complying with EU law on railway charging.

The Commission acknowledged that rail infrastructure in those two countries is suffering, but said it is “confident” that EU investments will reverse that trend.

EU member states are still squabbling over draft rules that will open up railway markets to competition, even after negotiators struck a deal last week on the long debated file.

Background

The European Commission’s recast of the first railway package in 2001 was adopted in 2012. It was designed to address the historic challenges to creating a consolidated railway market, which in the

The EU executive considers the rail sector as having too little competition, poor regulatory oversight and inadequate public and private investment.

The 2012 recast consolidates the 2001, 2004 and 2007 legislation and provides for strengthening regulatory oversight and performance of infrastructure operators. It also seeks to improve transparency in rail contracts and operations.

The Commission's 2013 proposal called for a separation of rail infrastructure managers and service operators, a full separation of passenger rail markets by 2019 and public tendering for most rail routes.

How does a freight train travel “eighteen kilometres per mile”? But aside from that, for rail to be competitive esp. transporting heavy freight, it needs to be efficient in getting things on and off a truck, onto the carriage, off again, back to another truck for delivery, and sometimes you need heavy lifting for all of that. The advantage of a truck alone is that once you’ve got it on, there’s no need to shift it again and no need to coordinate different timetables.